The National Stock Exchange (NSE) has announced a significant change regarding the expiry day for its futures and options (F&O) contracts, reversing a previous decision that would have shifted the expiry from Thursday to Monday. This decision, communicated in a circular dated March 27, 2025, comes in light of a consultation paper from the Securities and Exchange Board of India (SEBI) that has prompted the NSE to reconsider its approach.
Initially, the NSE had planned to implement the change effective April 4, 2025, which would have affected not only the weekly expiry of the Nifty index but also its monthly, quarterly, and half-yearly contracts. However, following feedback and discussions with SEBI, the NSE has decided to defer this change indefinitely.
According to the NSE circular titled “Revision in Expiry Day of Index and Stock Derivatives Contracts – Update,” the implementation of the earlier circular from March 4, 2025, has been put on hold. The circular was directed to all members of the F&O department and highlighted the need for compliance with SEBI's recent guidelines.
SEBI's consultation paper, also released on March 27, proposes that all equity derivative contracts should maintain their expiry on either Tuesdays or Thursdays. This suggestion aims to streamline the expiry process across different exchanges, as currently, the NSE has its contracts expiring on Thursdays, while the Bombay Stock Exchange (BSE) has shifted its weekly F&O expiry to Tuesdays from Fridays.
NSE CEO Ashishkumar Chauhan had previously expressed concerns regarding the fragmentation of expiry days. In an interview with CNBC-TV18 on March 10, he stated, “Whatever was SEBI's perspective of reducing daily expiry, I don't think is going to be met if we continue to have multiple expiries on different days. So, for me, if you want to really remove that, you need to have one single day, whichever way.” This statement underscores the NSE's commitment to aligning its practices with regulatory expectations while ensuring clarity and consistency for investors.
The decision to maintain Thursday as the expiry day for the Nifty index is likely to provide stability for traders and investors who have become accustomed to this schedule. The NSE's reversal may also reflect a broader strategy to enhance market efficiency and investor confidence in the wake of regulatory scrutiny.
As the financial markets continue to evolve, changes such as this one highlight the dynamic nature of trading practices and the importance of regulatory frameworks in guiding these developments. Investors and market participants will be keenly observing how these changes unfold and what implications they may have for trading strategies moving forward.
With the NSE's latest announcement, the focus now shifts to how the exchange will implement any future changes in response to SEBI's recommendations. The ongoing dialogue between the NSE and SEBI is crucial for ensuring that the Indian derivatives market remains robust and responsive to the needs of its participants.
For now, traders can proceed with their usual strategies, knowing that the familiar Thursday expiry will remain in place. This decision not only affects the Nifty index but also sets a precedent for how future changes in trading practices will be handled in collaboration with regulatory bodies.
As the market gears up for its next trading session, all eyes will be on the response from investors and analysts regarding the implications of this decision. The NSE's ability to navigate these changes effectively will be pivotal in maintaining its stature as a leading exchange in the region.
